Summer 2019

St. Johnsbury, VT—Community National Bank (CNB) St. Johnsbury Office Manager Michelle Cleveland had the privilege of presenting Ferne Loomis with the bank’s Community Service Award. This award was created to recognize remarkable people who give back to our communities making them better places to live, work and grow.  

Ferne has been a volunteer at the Vermont FoodBank distribution location in St. Johnsbury for 14 years. Each month she receives, organizes and delivers hundreds of food boxes to individuals and families. Once a month she picks up fresh produce at Northeastern Vermont Regional Hospital, made available through, Vermont FoodBank’s Veggie VanGo program. She brings the produce to older adults who are housebound throughout Caledonia and Essex counties. While making deliveries she makes sure that those with health issues are not in need of additional care.  

Ferne has volunteered countless hours to her community. She is the original organizer of the Lyndon Stars and Stripes Festival. For 10 years, Ferne helped to collect food donations for Lyndon State College students who managed the Lyndon State Rescue Squad, known today as, Lyndon Rescue. Ferne was also an auxiliary member who helped support the needs of the Lyndonville Fire Department. In addition to volunteering for emergency services, Ferne was a Lyndonville Town School board member for 15 years, a member of the Victory select board and she has volunteered for countless other civic organizations.     

CNB is proud to present Ferne with the bank’s Community Service Award for the second quarter of 2019. The bank recognizes it’s recipients by making a $500.00 contribution to a local non-profit organization of the recipient’s choice. Ferne has requested her donation be split between the Vermont FoodBank and the H.O.P.E. organization.

To nominate a deserving neighbor submit a nomination form or contact Marketing Assistant Anne Quirion at 802-487-3513 or [email protected]

I am pleased to report that Community Bancorp., the parent company of Community National Bank, reported earnings for the second quarter ended June 30, 2019, of $2,419,298 or $0.46 per share compared to $2,002,654 or $0.39 per share for the second quarter of 2018. Year-to-date earnings for 2019 are $4,191,203 or $0.80 per share compared to $3,985,197 or $0.77 per share a year ago. Also announced during the quarter was a quarterly cash dividend of $0.19 per share payable August 1, 2019, to shareholders of record as of July 15, 2019.

The Company’s consolidated assets on June 30, 2019, were $679,538,291, a decrease of $40,809,207, or 5.7%, from December 31, 2018. Net loans decreased $11,202,064, or 2.0%, since December 31, 2018. In addition to seasonal municipal loan runoff, this decrease is also due to the early payoff of a $10 million commercial real estate construction loan, as permanent financing was sought elsewhere. This resulted in the collection of a pre-payment penalty of $440,656, which partially offsets the interest income that will be lost as a result of the early payoff.

Total deposits decreased $52,666,937 or 8.7%, since December 31, 2018, with a notable decrease in core deposits totaling $39,888,431, or 13.3%. This decrease is primarily due to the seasonal runoff of municipal deposits which decreased approximately $43 million year to date, including an anticipated runoff of a large balance account with one municipal customer in the first quarter of 2019. Increases in interest bearing transaction accounts are noted in the year-over-year comparison, while the increase in wholesale time deposits is predominantly due to the use of brokered deposits as an alternative to short-term borrowing from the Federal Home Loan Bank of Boston.

Interest income increased $1,233,563, or 17.6%, for the second quarter of 2019 compared to the same quarter in 2018, and $2,155,093, or 15.6%, for the first six months of 2019 compared to the same period in 2018. Interest expense increased $608,454, or 64.8%, for the second quarter of 2019 compared to the same quarter in 2018, and $1,278,246, or 70.7%, for the first six months of 2019 compared to the same period in 2018. The increase in interest income is due in part to the prepayment penalty noted above, as well as the increases in short-term rates. While the increase in short-term rates is having a positive impact on interest income, it is also continuing to put upward pressure on interest rates paid on deposit accounts and other borrowings.

Although net interest income was favorable, non-interest income decreased $256,023, or 15.2%, for the second quarter of 2019, and $332,992, or 10.8%, for the first six months of 2019. This decrease was primarily due to a one-time gain on sale of property of $263,118 in 2018 which was directly related to the sale of a condominium unit to the Company’s affiliate, CFSG, during the second quarter of 2018. Non-interest expense decreased $24,915, or 0.5%, for the second quarter of 2019 and increased $399,893, or 4.1%, for the first six months of 2019, primarily due to increases in salaries and wages and employee benefits.

From positive retained earnings, shareholders’ equity grew to $65.7 million with a book value per share of $12.32 as of June 30, 2019, compared to $62.6 million and $11.72 per share at the same time last year.

We are pleased to recognize employees celebrating service milestones and find it newsworthy to share that many have been with the bank for decades. Our Wellness Committee continues to offer educational material on a variety of topics and engaging activities that help to promote healthy choices.

Service Awards
• A 5-year award was celebrated by Enosburg Falls Office Supervisor Shannon Gervais.

• 10-year milestones were achieved by Derby employees, Darlene Potvin, Electronic Banking Assistant and Personal Banker Shelly Wilkins.

• Three of our employees celebrated 30 years of service. Heather Walsh and Laurie Wood, both Derby Mortgage Underwriters, and Morrisville Certified Teller Deborah Lefebvre.

Retirement News
Derby Loan Servicing Representative Rose Mary Smith announced that she’ll retire in the fall after 23 years at CNB. Rose Mary focused her career supporting the Loan Services Department. She weathered fast-paced technology changes, the migration from paper files to electronic files and the forever-changing regulatory laws that accompany lending today. The bank will miss her dedication and we are happy she will begin a new chapter of her life as the seasons change. Thank you Rose Mary for the years devoted to CNB. The bank is fortunate to have a dedicated and skilled staff.

Wellness News
The bank’s Wellness Committee was excited to kick off the summer with a sleep challenge for the month of June. Employees played a fun game of Chutes and Ladders and moved accordingly on the board with the number of hours they slept. Participating employees were eligible for a themed prize drawing. Since July is usually the hottest month of the year, employees were encouraged to stay hydrated. Hydration stations were set up in each office and lemon ice water and watermelons were provided. Read next quarter’s newsletter for more highlights.

OCTOBER 2, 2019, Conway Scenic Railroad – North Conway, NH

All Aboard! Come and experience a first-class train ride as well as a three-course luncheon on the Conway Scenic Railroad’s elegant dining car, the Hattie Evans, through Crawford Notch! On this excursion, you’ll travel on what was once the Maine Central Railroad’s famed Mountain Division line, on tracks that were laid in the 1870s. Enjoy some of the most dramatic natural scenery in the East as you travel through spectacular Crawford Notch past sheer bluffs, steep ravines, cascading brooks and streams, panoramic mountain vistas, across Frankenstein Trestle and Willey Brook Bridge – enroute to Crawford and Fabyan stations.

The price for this trip is $169.00 which includes First Class train ride, luncheon, tax and service charge. We will leave the Community National Bank upper parking lot in Derby at 7:00 a.m. and expect to arrive back in Derby at approximately 8:00 p.m. Please call Community Circle Director Linda Cloutier or Community Circle Assistant Julie Mossa at 802-334-7915 for a detailed itinerary and to reserve your spot.

Loading up the wagons...

Since joining CFSG in early 2008, I have enjoyed the loyal support of hundreds of CNB & CFSG employees and valued clients. With the aid of technology and our top-notch main office staff in Newport, I will continue to administer my client relationships from the desert. My priority is that this will be a seamless change for my clients and colleagues.

I plan to supplement my “long-distance” phone, email and video communication with clients with periodic visits “back home” to Vermont. My husband and I have family here and our roots will always be in the Green Mountain State, but we have decided to trade in our winter boots for sandals! If you are ever near Southern Nevada along the Colorado River, or if you have friends and family there I might be able to meet, give me a shout! My email address is [email protected] and my phone number is 802-535-2051.

Meanwhile, CFSG will continue to be well-represented in CNB branches by my colleagues, Joe Preddy and Bob Thompson. If you are interested in meeting with Joe or Bob about our investment management services, they will continue to be available to meet with you in person at any Community National Bank office or other convenient location to provide unbiased, comprehensive investment and financial planning advice.

Now, on to the Investment Insights portion of this column. A well-diversified portfolio, prudently and professionally managed according to time horizon and risk tolerance, should help you reach your financial goals over the long term. This is especially appropriate advice given the bouts of volatility we’ve seen in the financial markets of late and all the talk about recession. No matter if we are late in the cycle of this long-running bull market, and if interest rates continue to decline, an investor’s portfolio and financial plan should take many other factors into consideration. If you haven’t checked in with your financial advisor or if you would like a second opinion, this may be a good time to discuss whether your portfolio is constructed appropriately for the long term.

Community Financial Services Group manages $800 million for hundreds of individuals, families and non-profit organizations. If you are interested in meeting with a CFSG representative, please call 877-334-1677.

Community Financial Services Group, LLC (CFSG) is the trust and investment management affiliate of Community National Bank. CFSG accounts are

• Not deposits or other obligations of the bank
• Not guaranteed by the bank
• Not insured by the FDIC; and
• The investments are subject to risk, including the possible gain or loss of principal.

Nominate a volunteer today!

In this issue we share a couple of stories about two outstanding individuals who have gone above and beyond for their community. Over the years, the bank has recognized several community members who volunteer in various ways. Each quarter, we honor individuals or groups of people who help to strengthen our communities through volunteer work. If you know of a deserving volunteer that doesn’t receive monetary compensation, please submit a nomination. Provide as much information as possible about the person(s) you’re nominating. Nominees continue to be eligible for selection up to 12 months after the nomination date. Nominations can be submitted online by visiting our website or sending an email to Community National Bank Marketing Assistant Anne Quirion at [email protected] or by mailing to Community National Bank, Marketing Department, P.O. Box 127, Troy, VT 05868. A team of bank employees review the nominations and select a deserving recipient(s) quarterly. Our awarded recipients are recognized for their volunteerism with a $500.00 donation to a local nonprofit organization of their choice, made on their behalf by Community National Bank.